How to analyse a bill

Accounting software consultant Heather Smith explains her simple method for analysing a bill to make sure your paying the correct amount, even if your normally someone who is number illiterate

I recently had some billing issues with TELSTRA. They sorted it all out, but to cut a long story short, I paid a bill that was less than a normal month, which then messed up the cycle of paying my TELSTRA bills. When I received the last bill I thought it was larger than it ought to be. So I analysed the bill, and I thought I would share the simple analysis.

Dates

8 Nov/Dec

8 Dec/Jan

8 Jan/21 Jan

22 Jan/21 Feb

Number of days

29

30

13

30

Home ultimate bundle

$150.10

$148.60

$67.14

$153.70

Mobile

$84

$84

$37.94

$84

Home ultimate bundle per day

$5.18

$4.95

$5.16

$5.12

Mobile per day

$2.90

$2.80

$2.92

$2.80

Telstra bill per day

$8

$7.75

$8.08

$7.92

Let me explain this to you. Remember I was concerned about is that I had been paying monthly bills, and then due to a mix up ended up paying a short bill, for only 13 days. I wondered if I had still paid a full monthly amount, even though the monthly cycles were messed up.

So I needed to get all the bills I was concerned about. I created 4 columns, with the different dates they covered. I calculated the number of days the bill should cover. I then entered the actual two separate amounts I am billed. The next two lines down analyse the payment on a per day basis. So you can see over the four bills they are roughly the same, and on average I am paying between $7.75 and $8.08 for my TELSTRA bill.

By doing a high level analysis like this, I have determined that the billing is probably ok, and I do not need to investigate further. I also know that on average, in my business I have to cover $8 TELSTRA bills a day, which I can build into budgets, and cash flow forecasts.

Many people tell me that they don’t get numbers, but if you break down how you are analysing them, it can become very simple. Always ask yourself the question does the bill seem reasonable. If it does not seem correct, try and identify what is wrong with it ask your accountant to look at it.